Study: Global Holiday Net Sales To Top $25B

By Clare Saliba
Oct 22, 2001 8:44 PM PT

Despite the slowdown in the global economy, online retailers worldwide are expected to
rack up US$25.3 billion in sales this holiday season -- marking
a 39 percent spike over last year's figures -- according to
a new study released Monday by
GartnerG2, a
research unit of Gartner (NYSE: IT and ITB).

The research firm also predicts that the fallout from the September 11th attacks on the
U.S. will only have a negligible impact on planned spending by U.S. consumers, with
domestic holiday sales via the Web estimated to climb 30 percent from 2000 to
$11.86 billion. Repeat buyers will help to drive much of the growth.

"The increase in online holiday shopping sales will be driven by increases
in online users, buyers, and most importantly, the experience level of
online buyers, which our research indicates is the single most important
predictor of online spending," said GartnerG2 senior analyst Mike Cruz.

Four Out of Five Shoppers ...

As part of its two-week survey of nearly 16,500 American consumers completed
earlier this month, GartnerG2 found that, of those who made online
purchases last year, over 80 percent were inclined to shop via
the Internet at the same rate in the coming months.

Over 13 percent of online shoppers reported that they will likely
spend less online this holiday season, and approximately
6 percent said they intend to spend more.

As of mid-2001, GartnerG2 said more than 71 million U.S. adults had made an online
purchase within a three-month period, a 23 percent increase from the previous year.

More Satisfaction

Because many Web sites have increased the functionality and
ease of use on their sites, the study said, consumers are returning to buy more online.

"In 1999, many consumers were disappointed with
the operational and customer service performance of
online vendors," said GartnerG2 research director
David Schehr. "The result was that over half of those
who bought gifts online in 1999 stayed away
from holiday buying online in 2000."

However, e-tailers got their act together in 2000 and, as a result, more
than three-quarters of those surveyed by GartnerG2 reported that they were
very satisfied with their buying experience.

"This means there will be less attrition from those who bought online last
year, and those returning this year are likely to increase their spending
levels," said Schehr.

Around the World

While North American e-tailers continue to lead the pack in terms of online
sales, the report concluded that other regions are displaying stronger
growth rates. According to GartnerG2, roughly 53 percent of holiday spending
over the Internet, accounting for $13.4 billion, will be made outside North
America, compared to 50 percent last year.

The study found that the jump in Web users worldwide
has mirrored the number of new retailers charging into
the online arena. For instance, GartnerG2 said there has
been a marked increase in European brick-and-click
marketers, with many hoping to improve their proposition
and receipts through online holiday sales.

"In Europe, e-tailers continue to improve their Web site functionality by
offering stock checking, order tracking and keeping their customers informed
by e-mail," said GartnerG2 European business analyst Gill Mander.

As a result of these beefed-up offerings, the study projects European
consumers will spend $8.58 billion online in the next three months, almost
40 percent more than the $6.15 billion in transactions completed during the
same period last year.

Asia Ascends

Echoing the moves of their European counterparts, local retailers in the
Asia/Pacific market are starting to develop multichannel sales and marketing
models, including some direct selling of products and services on the
Internet.

Among the strongest online vending adopters in the area,
said GartnerG2, are Australia, New Zealand, Hong Kong, Singapore,
South Korea and Taiwan.

The study said retail banks, card companies and domestic consumer portals
are helping to drive the region's growth by actively promoting and fostering
online buying through site certification and extended customer loyalty
programs.

Moreover, many consumers are drawn to online shopping by the wider
availability of specialty items on the Web that are in low supply in the
buyers' local markets.

Christmas Cheer

"The fourth quarter has also increasingly become a holiday shopping season
in Asia/Pacific," said GartnerG2 Asia/Pacific research director Lane
Leskela. "Christmas has penetrated the local culture of many non-Christian
societies in the region as a family and friends gift-giving celebration."

GartnerG2 estimates that holiday sales in the region will climb over 53
percent from last year to $2.46 billion. Japan will likely display the strongest growth
rate of any other country, according to GartnerG2, with spending there
mushrooming 68 percent to $1.4 billion.